Development and production

The Field Development Plan (FDP) is the support document for the OGA’s development and production authorisations and should provide a brief description of the technical information on which the development is based.

Here is a downloadable copy of the OGA Guidance on the Onshore Regulatory Regime. This guidance, which consolidates previously available guidance, sets out how the OGA will normally consider stated matters and is not a substitute for any regulation or law and is not legal advice.  

 

Development and Production

  • Field Development Plan (FDP)

    The Field Development Plan (FDP) is the support document for the OGA’s development and production authorisations and should provide a brief description of the technical information on which the development is based.

    As Licensees are jointly and severally responsible for the FDP, it must represent a single view of all the licensees. The Licence operator is usually responsible for producing the FDP and to ensure that all necessary consents and authorisations are obtained. It is usual for the OGA to conduct discussions with the operator as the representative of all the licensees.

    The document should provide a summary of the operator’s understanding of the field although more information must be provided if required by the OGA. Here is a suggested structure for the document. The OGA encourages operators to engage with the OGA early to discuss content, drafting and development options before submitting an FDP, this will help make the process more efficient.

    The OGA is committed to making information publicly available as soon as is reasonable but recognises that FDPs typically contain commercially sensitive information. The OGA will publish FDPs six years after they have been approved, but will consider representations to extend the period of confidentiality.

    In addition, the OGA will require:

    • a Board letter confirming scope of insurance or availability of necessary funds for any required remedial work;
    • a Board letter confirming availability of planning permission and absence of any on-going planning disputes; and
    • a Board letter from each licensee confirming that they support the development plan and have the necessary funds available.

    This “Board Letter” should also include a statement confirming that the OGA’s licensee residence requirements have been met.

  • Field Development Plan Addendum (FDPA)

    The focus of the OGA, once a development has been authorised, will be to ensure that the Field Development Plan is being followed or modified appropriately as the understanding of the field develops.

    If an operator wishes to deviate from the agreed Management Plan authorised by the OGA in an FDP, they are required to submit a Field Development Plan Addendum (FDPA). The process for agreeing an FDPA is similar to that for an FDP and here is a suggested structure for the document. An FDPA will also be required when an extension of long term production consent is requested, and should be uploaded to the PORTAL consent application and a copy emailed to the onshore team (onshore@ogauthority.co.uk).  

     

  • Field Development Plan Approval and Production Approval

    The development will be authorised once the OGA is satisfied that the FDP meets its requirements.

    The OGA will require:

    • a Board letter confirming scope of insurance or availability of necessary funds for any required remedial work;
    • a Board letter confirming availability of planning permission and absence of any on-going planning disputes

    The OGA's approval will cover both the construction of the facilities and other infrastructure, and the production of hydrocarbons from the field. Subject to the terms of the licence, agreement will usually be given for production over a period that can be reasonably forecast with appropriate tolerances in the levels to be produced. Conditions may be imposed to give the OGA powers to require a review if performance falls outside these tolerances or if the field is found to differ from the initial perception to such an extent that there is a risk of a loss of significant economic reserves.

    If production consent is issued for a duration that is less than the anticipated life of the field it is the responsibility of the operator to apply for renewed approval to allow production to continue, and an updated Field Development Plan Addendum (FDPA) may be required at that time.

    If, either at the time of the authorisation of a FDP or during the period of production, it appears that production is likely to continue beyond the term of the licence(s) involved, it is the responsibility of the operator to apply for an extension to the licence, and this extension will, among other considerations, be subject to the continuing satisfactory performance of obligations under the licence.

    How to Submit an Application

    The OGA's consent will be given in the form of production consent through the UK Energy Portal and the FDP needs to be uploaded in the application. Online applications can only be applied for using the Portal so all applicants should ensure that an appropriate individual within that company has user access rights. Separate applications for production, flare and vent consents will need to be completed as appropriate.

    Users who do not have a UK Energy Portal account should send an email to ukop@ogauthority.co.uk  requesting an account and including the reason: 'to gain access to the UK Oil Portal Field Consents system'. The following information about the user should be supplied: Forename, Surname, Organisation Name (Employer), Job Title, Work Telephone Number & Email Address.

    Users who already have UK Oil Portal accounts should check that they know their login details and password and that details held about them on the Portal are correct - by logging in to the Portal.

  • Further information relating to FDPs and FDPAs

    Operatorship and Licensee Requirements 

    Information about regulatory requirements for operator competency and financial viability and capacity requirements are found under the Licensing Regime, and these will be considered at various stages of the regulatory process. 

    Field Returns

    Monthly Petroleum Production Reporting System (PPRS) returns are required from a producing field. Annual Field Returns are currently not required onshore, although the OGA may introduce this requirement in future.

    Licensees are requested to promptly contact the onshore team (onshore@ogauthority.co.uk) if production does not fall within the consented range or the geotechnical understanding or economic recoverable resource potential changes significantly.

    Flaring and Venting of Gas

    The OGA recognises that during the appraisal, commissioning and production phases of a development, the flaring and/or venting of some gas may be unavoidable. However, this flaring or venting must be kept to the minimum that is technically and economically justified. The OGA controls gas emissions by requiring licensees to apply for consent to flare or vent gas emitted by their fields. The main purpose of this requirement is to ensure that gas is conserved where possible by avoiding unnecessary wastage. The Environment Agency considers the environmental impact of emissions.

    Unit Development

    Where a Field Development Plan is proposed for a field which extends into the area covered by a neighbouring licence operated by different company the OGA needs to be satisfied that the ultimate economic recovery of petroleum is maximised and that unnecessary competitive drilling is avoided. The most efficient way to satisfy these requirements and therefore avoid any possible delay in the authorisation process is for licensees to discuss with the neighbouring licensees at an early stage and propose an agreed FDP.

    In cases where the licensees have not reached an agreement, the OGA has powers to require a unitisation between licensees. However, licensees should be aware that the OGA will not necessarily refuse to authorise development to a particular group of licensees who have not concluded an agreement with the licensees of an adjacent block on the basis that they have not concluded such an agreement. The OGA does not consider that powers to require unitisation extend to issues of fairness and equity between groups of licensees. The OGA's position is that proprietary rights do not exist in unextracted hydrocarbons and ownership of hydrocarbons arises only once they have been extracted under appropriate regulatory consent. The OGA's acceptance or rejection of any Field Development Plan will, therefore, be on the basis of whether it is the optimum development in the light of its objectives If, in any intended development, there is a likelihood of claims or disagreement between adjacent licence groups related to the field's extent, the OGA should be consulted at an early stage.

    Field Determination

    So that the licensees understand what constitutes a field for both development and tax purposes, the OGA will issue a proposed Field Determination at an early stage in the FDP authorisation process, utilising the geological information that is available to it at that time.

    For Abandoned Mine Methane  fields, this will normally be a 1km square around the vent or mines gas well, rather than the workings expected to be drained by the development because of the uncertainty and complexity of many abandoned workings.

    For Coalbed Methane (CBM) fields the area will usually be defined by the areal limits of the coal seams to accessed by the proposed development. In the case of a phased project, this might mean that the field will need to be redefined as further blocks of coal are drilled. Fields draining from shale formations will also usually be defined by the extent of the area likely to be accessed by the planned development and if there are decision points to expand the development later in a phased project, the field determination will change incrementally as more information is known. Where a proposed field development seeks to develop only a subset of stacked prospective horizons, the field determination may include a depth cut-off.

    Wider Regulatory Regime

    There are wider controls on onshore oil and gas development and production which do not come within the jurisdiction of the OGA. The Environment Agency and the relevant local mineral planning authorities implement environmental controls, the local mineral planning authority is responsible for site reclamation, and the Health and Safety Executive (HSE) regulates health and safety. An oil and gas development must have the relevant authorisations from each of these relevant regulators for both construction and production operations.

    Board Confirmations

    Before approving an FDP, FDPA or EWT the OGA requires:

    • A board letter from the operator confirming scope of insurance or availability of necessary funds for any required remedial work;
    • A board letter from the operator confirming availability of planning permission and details of any planning disputes; and
    • A board letter from each licensee confirming that they support the plan and have the necessary funds available.
  • Cessation of Production (COP)

    The OGA expects to be made aware long in advance of when production is anticipated to cease. Please contact the onshore team (onshore@ogauthority.co.uk) to arrange a technical review. A report is required. The amount of detail to be included in the report will depend on whether options to extend field life have been appropriately covered in previous field reports and should cover:

    • Definition of economic limit and determination of cut-off rates and timing;
    • Possible options for extending field life;
    • Cash flow over the period up to this economic limit and approximately 2 years beyond;
    • The costs and any revenues associated with cessation of production itself (capital and operating expenditures and any residual value of field assets);
    • The form and costs of abandonment if these affect the timing of the economic limit;
    • Production and injection profiles together with projections through to economic limit and approximately 2 years beyond;
    • Details of any remaining licence obligations;
    • Appropriate reservoir maps indicating the estimated location and distribution of remaining technically recoverable oil/gas that will be undrained at the time of cessation of production. In addition, some conception of likely changes in such distributions over time should be given for completeness of the record; and
    • Confirmation that all abandonment requirements in the relevant planning consents will be met and details of what is involved

    It is important that sufficient information is retained after the cessation of production to enable other interested potential operators to take a reasonably informed view about the potential for field redevelopment. Redevelopment may become feasible if, for example, new technology allows a significantly improved recovery factor. For this reason, the COP Relinquishment Report documents will be released once the licence(s) involved are relinquished with the Relinquishment Report.

    The Environment Agency (EA) and HSE also have specific regulatory requirements which must be met.

  • Petroleum Production Reporting System (PPRS)

    On 9 June 2017, the Oil and Gas Authority (OGA) launched its refreshed Petroleum Production Reporting System (PPRS) on the Energy Portal, allowing Operators to report their monthly flow rates for gas, oil, condensate, flare, venting, gas and water injection data with improved functionality and capability and aid and inform the OGA’s Asset Stewardship model.

    More information on PPRS

    Portal Support for PPRS will be offered through the usual UKOPs helpdesk (ukop@ogauthority.co.uk, Tel 0300 067 1682).